Masolino let out a slow, relieved breath. So it was typical insider stuff after all — and, hotel manager or not, Ellerby was playing it like some back-office IT drone... except he was too stupid to hide his dirty trades amid a lot of financial noise. Masolino had been worried for a moment there, but this was going to be easy. All he had to do was identify which investment bank happened to be trading large blocks at the time these trades were made, and go from there.
The activity he was currently examining came from a few years back, so Masolino moved his focus closer to the present. He quickly noticed that the trading pattern had changed a few weeks ago. At that point, this Ellerby started making bigger trades, for bigger profits, and held on to the trades for longer — sometimes as long as an hour.
Masolino had a number of programs that he’d coded himself, and now he ran one that compared block trading of equities by large investment banks to Ellerby’s trading, looking for the match.
There was no match.
This was odd. Another thing that was odd was that the stocks were always Dow Jones Industrials listed stocks.
Now he began comparing the time stamp of each trade with stock price movements in general. Ellerby’s trades usually came during periods of high volatility and took advantage of small fluctuations that occurred sometimes within seconds after the trade. How was this possible? The trades always came right before an uptick in the stock. Not huge upticks, but decent enough to make money — although the money made in the last three weeks had increased dramatically.
He couldn’t get around it: this was the classic pattern of someone getting tips from an insider with access to private information, probably an influential stock picker or newsletter. Masolino had a database that aggregated the stock picks of thousands of such sources, and now he ran it against Ellerby’s trades.
Nothing. No match.
Now, that was damned strange.
Perhaps the trades were based on acquiring advance news about companies, like earnings reports or drug approvals, that hadn’t yet been released but that some insider was privy to. He had a program that handled that, too, comparing the trades to news reports involving the same stock.
That came up empty as well.
Masolino ran Ellerby’s trades against every program in his digital toolbox that matched trades with outside events: merger announcements, lawsuit filings, earnings reports, commodity movements, political news, and a host of other things that move stocks abruptly — and still couldn’t find a pattern.
Next he looked at who was buying and selling these stocks just before or after Ellerby’s trades. If Ellerby knew someone who bought and sold large blocks of stock, and he acted before that person did, he could make a profit from the movement of the later, larger trades.
Again, nothing came up. No big blocks of stock were dumped or purchased, no insider selling or buying from company executives. Ellerby simply seemed to have anticipated ahead of time an uptick in the stock price and bought into it, then sold at a profit. He could have made much larger profits by buying and holding some of these stocks. But he never did. The trades were quick, simple, and unremarkable — and every single damn one made money.
As Masolino went forward in time, he again saw the break that took place three weeks before the end. He saw it in every trading account. In recent weeks, the trades got bigger, more profitable, and longer.
Four hours later, Masolino, bathed in sweat, a pile of damp paper towels on the floor behind him, hands trembling, finally shut down his system. It was only two o’clock in the afternoon, but he was going home early to have a stiff martini.
Ellerby’s trading went back years and years, via every imaginable financial instrument, all over the map: those same quick little trades making modest profits. Every trade was legal, or so it seemed. Masolino could think of only one answer: Ellerby was a stock-trading genius the likes of which the world had never seen. Given the short time frames on so many of the trades, he must have developed some incredibly powerful mathematical quantitative trading algorithms that monitored markets and traded accordingly. An algorithm like that — that never made a mistake and always made a profit — would be the holy grail of Wall Street. But such programs, no matter how powerful or ingenious, could never be 100 percent accurate. It was impossible, given the random fluctuations of the market, to ever be perfectly accurate. But the hard drive held only records of transactions — no indication of how the trades were identified and executed and no algorithmic trading program.
And by the end of it all, Ellerby had amassed a paper fortune of close to $300 million. A hotel manager. Three hundred million. And $200 million of that had been made in just the last three weeks.
Christ, Masolino needed that martini.
27
Francis Wellstone Jr., having donned a new suit and tie, sat in the same parlor, in the same venerable wing chair, with the same view of West Oglethorpe Avenue, that he recalled from his first visit. There were, however, a few differences of note. It was not morning, but past six in the evening; he’d been served sweet tea instead of lemonade; and his hostess, Mrs. Daisy Fayette, was in a less agreeable mood than the first time they’d met.
“Do you mean to say that he actually interrupted your segment?” Wellstone asked, injecting surprise and sympathy into his voice.
Daisy nodded, her lavender-tinged hair shaking in displeasure. A tiny cloud of powder rose from it before settling again. “I was just beginning to explain why the Montgomerie House was haunted — an eddy in the spiritual ether, caused by the murder-suicide — when he cut me off. In midsentence... and in front of everybody, with the cameras still filming!”
“I’ve heard that Betts has a reputation of being an unpleasant person to work with. But to needlessly humiliate someone who’s helping him...!” Wellstone shook his head, at the same time finding a secret pleasure in the fact that he wasn’t the only one to be recently humiliated by that bloviating dotard producer.
By now, Wellstone had taken the measure of Savannah — its history, legends, and secrets. In Daisy’s circle of southern gentility and decorum, Betts’s oafish behavior would have been dealt with in a different way, and old Mr. Fayette, if he hadn’t been moldering in the grave, might have called Betts out, fought a duel with him, over the insult. Perhaps the old ways weren’t so barbaric after all.
On the other hand, Daisy’s outrage was exactly what he’d been hoping for. After his fury over his treatment at Lafitte’s had cooled, his mind had begun working strategically again. Daisy was almost certainly ready to become a useful informant on Betts, his inside source, so to speak.
“I visited the Montgomerie House myself just yesterday,” Wellstone said, taking a sip of iced tea. “I thought it to be one of the most fascinating spots I’ve ever visited. And spiritually disturbing,” he hastily added. “Especially after reading your most informative, ah, book about it.”
“Thank you,” Daisy said.
Pamphlet, Wellstone had almost said; fortunately he had corrected himself in time. He’d tut-tut a little more, then get down to business. “I’m surprised, actually, to hear that Betts had so little interest in the Montgomerie ghosts. I would have thought it precisely the kind of thing he could work into his documentary.”
“Oh, he was interested,” Daisy said. “It was that other man who said there were no ghosts.”